U.S. Sen. Ron Johnson on Monday defended his investment in an Irish company listed as the European distributor for the Oshkosh plastics firm he ran before being elected, denying that he is using the overseas company as a tax dodge.

Records show Johnson owns 9.9% of DP Lenticular, a Dublin-based firm that says it distributes specialized plastic sheets made by Pacur Inc., the firm Johnson headed for years before he took office in 2011. He still has a small ownership interest in Pacur.

Johnson's Democratic opponent, former U.S. Sen. Russ Feingold, alleges that DP Lenticular is a shell company that appears to be a way for Pacur and Johnson to legally dodge paying some U.S. taxes. Feingold's team has emphasized that DP Lenticular has a single employee, who is a Belgium citizen, and is controlled by a Spanish holding company that pays no taxes.

By owning less than 10% of the Irish company, Johnson does not have to report his stake in the international company to the Internal Revenue Service, but he has disclosed the holding in his annual Senate ethics statements.

"It’s not that Sen. Johnson doesn’t understand the issues facing middle class and working families," said Michael Tyler, spokesman for Feingold, who lost his seat to Johnson in 2010. "It’s that, just like Donald Trump, his own interests come first."

But speaking to reporters after a Monday morning appearance at Greater Praise Church of God in Christ in Milwaukee, Johnson said DP Lenticular is a legitimate business that helps Pacur sell its products in the European market. His brother Barry is listed as a director for the Irish firm.

Johnson campaign officials emphasized that DP Lenticular is not a subsidiary of Pacur and that Johnson pays state and federal income taxes on the all the dividend income he receives from the Irish firm.

“That's just smart business.”

U.S. Sen. Ron Johnson

"This is actually how you export product, OK?" the first-term Republican senator said. "You have sales agencies.… I have small investment, primarily, so I can see the financial information of that."

As a result of his investment, which he made initially in 2007, Johnson said he receives dividends of about $15,000 annually from DP Lenticular. He said he receives no other income from the firm. The investment was first reported by The Huffington Post.

Johnson acknowledged that he had structured his investment so he could avoid reporting requirements to the IRS. Federal rules mandate that U.S. citizens who own 10% or more of the stock value of a foreign corporation must disclose that holding to tax officials.

"All the time, you take a look at what government rules are, so you can minimize the impact of government regulations," Johnson said. "That's just smart business."

In the past, Johnson has defended the rights of U.S. companies to limit taxes through the use of international subsidiaries or by relocating their legal residence to a lower-tax nation, arguing that American corporate tax rates are too high.

But he argued Monday that is not what is occurring here. He described a DP Lenticular as "one guy with a bunch of sales agencies" and reps who are responsible for selling Pacur's products throughout Europe. The firm's website says it is the "only European company dedicated solely to the promotion and sales of Lenstar and EcoLens lenticular sheets and roll stock,” two products made by Pacur.

Pacur has never, Johnson said, diverted profits or income to the Irish firm.

"There's no profit parked over there or anything else," Johnson emphasized. "Those profits are paid out every year, and I report them and I pay taxes on them."

That's not to say there are no tax advantages to investing in the overseas company.

Ireland does not tax dividends earned by U.S. investors, as is common in a number of other countries. In addition, Ireland has earned a reputation as a tax haven, in part, because its corporate tax rate of 12.5% is much lower than it is in the United States and many other countries.

Johnson dismissed criticisms of the investment, saying DP Lenticular is no "shell company."

He said Feingold has "no clue" how business is conducted. Besides, he noted, the exports distributed by the Irish firm produce jobs in Wisconsin.

"It's another attack on another successful family manufacturer that exports product," he said. "It's sheer class warfare. Sen. Feingold has nothing in terms of record to run on in 34 years in politics, so his ugly campaign — let's face it — has been full of lies, distortions and class warfare. This is just another example of that."

But Kory Kozloski, Democratic Party of Wisconsin executive director, disagreed with Johnson's characterization of his investment: "It certainly appears that Senator Johnson has been hiding hundreds of thousands of dollars in off-shore tax havens to avoid paying taxes."

Kimberly Clausing, a professor of economics at Reed College, couldn't speak to the specifics of the Irish company but said Johnson's 9.9% stake and the one employee "sort of suggests it's a conduit for tax avoidance rather than a real manufacturing or economic subsidiary."

"And this is a pretty common thing," Clausing said. "Multinational companies throughout the world often use Irish subsidiaries as conduits to create change of ownership, that can limit or reduce their tax burden, sometimes down to zero."